If consolidation is to be real, it must begin where it is hardest – inside the apparatus itself.
This autumn we face another grand performance – the approval of the state budget. This time, its central backdrop is to be consolidation. A word that sounds technocratic, but in practice means only one thing: someone will have to pay the bill for years of wastefulness. And the Slovak government has already made it clear who that will be.
Revenues and expenditures
The budget has a revenue side and an expenditure side. Purely mathematically, it does not matter whether we increase revenues or cut expenditures – the result should be a positive effect on the balance of public finances. But instead of pure mathematics, the government presented a “key”: one third citizens, one third companies, one third the state.
Translated: citizens will pay a third through new taxes and fees, companies will hand over another third, and the state itself will reach into its own pocket only at the level of the final third. In other words – those who feed the state are to bear twice the burden compared to the state itself.
And here lies the core of the problem. The state is nothing more than a service organization paid for by the productive part of society – and it is not paid little. Taxes, levies, fees – these are the sources from which the state lives. The citizen and the business are the clients financing the services. But in consolidation the tables turn – the client has to pay more, while the “service provider” saves the least.
The burden on people and companies
Even in the first wave of consolidation, it looked the same: the productive sector carried more than 80 percent of the burden, while the state made only cosmetic savings. Now the scenario repeats itself. But the economy is not bottomless. Squeezing citizens and companies with higher taxes and fees may patch up the numbers in the short term, but in the long run it destroys the very source of financing. If production is suffocated, so too is the state’s future income.
If consolidation is to be real, it must begin where it is hardest – inside the apparatus itself. Fewer offices, fewer duplications, more digitalization, and more efficient services. Otherwise, consolidation will become just another round of punishing those who create value.
A test for the state
Consolidation, Part Two, is therefore not only about numbers. It is a test of whether the state will admit that it is merely a service organization financed by citizens and companies – or whether it will once again pretend to be the master whose bills are to be paid by someone else. If it fails this test, it risks that in a few years there will be no one left to finance its existence. And then it will not only be the budget on its knees, but the state itself.
Source: Peter Blaškovitš for HN
